Vacation accrual and pay
is one of the key wage and hour areas where employers run into trouble. But you
can head off disputes by having a clear vacation policy, spelling out how
vacation accrues, when it can be used, and when it will be paid out. Here’s a
sample vacation policy that you can tailor to your organization’s needs.
The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.
Sample Vacation Policy
It is important for all
eligible employees to have time off for rest and relaxation. Thus, the company
provides eligible employees with annual paid vacations based on years of
service from the last date of hire. Part-time employees working fewer than 20
hours per week, as well as summer and temporary workers, are not eligible to
earn vacation.
Accrual Rates. Vacation for full-time
eligible employees accrues on the following schedule:
Completed Service = Days
of Vacation
Six Months to Three Year
= 10/12 of one day (or 6.65 hours) per full month worked, up to 10 days per year. Note that no vacation
is earned or accrued, and no vacation may be taken, until six months of
continuous service is completed.
Four Years to Nine Years
= 15/12 of one day (10 hours) per full month, up to 15 days per year.
Ten or More Years per
Year = 20/12 of one day (13.3 hours) for each full month worked, up to 20 days.
Part-time employees
working 20 or more hours per week accrue vacation on a pro-rata basis.
Cap on Accrual. Vacation accruals are
capped at 1.75 times an employee’s current annual entitlement. For example, an
employee with five completed years of service may accrue no more than 26.25
vacation days. When the accrual cap is reached, the employee will not earn
additional vacation until the employee has taken vacation such that the accrued
amount falls below the cap.
Pay on Termination. An employee’s accrued,
unused vacation will be paid at the time of termination at the employee’s
current rate of pay. [The company will not pay employees in lieu of taking
accrued vacation except on termination of employment.]
Scheduling and Approval.
Vacation
requests must be in writing and submitted to the employee’s supervisor no less
than two weeks prior to the beginning of the desired vacation period. Employees
are expected to schedule their vacation so as to maintain continuous and
efficient service for our clients and effective processing of the workload, and
supervisors will approve vacation requests consistent with the company’s
operating needs. Vacation requests will be considered on a seniority basis in
the event two or more employees request the same vacation period and workload
demands prevent such employees from being absent at the same time.
company holiday falls within your vacation period, that day will be treated as
holiday pay and not vacation pay.